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Rule changes that will make discoms solvent, won't raise political heat

Power ministry will allow distribution companies to raise tariffs without waiting for regulators' approval

Subhomoy Bhattacharjee New Delhi

Premium

Photo: Bloomberg

5 min read Last Updated : Apr 19 2023 | 4:27 PM IST

Dues electricity distribution companies (discoms) owe to their states is reducing, giving them space to raise consumers' power bill when fuel prices rise. Dues are now at almost Rs 50,000 crore, halving from levels at the same time last year.

To help things, the union power ministry has offered them a leeway. Discoms can adjust their power tariffs for fuel costs, which mostly arise from imported coal, without having to wait for the state regulators' approval. The offer has a rider: discoms have to adjust tariffs within 90 days of the ministry publishing its regulations, or they have to wait out the year.

India allows changes in retail price of electricity only once a year, resulting in haggling between state electricity regulators and discoms. The power ministry proposes to bring clarity in the sector by changing the rules under the Electricity Act. The changes in Fuel and Power Purchase Adjustment Surcharge (FPPAS) say that if fuel cos